Brain drain is one of the major hurdles the Philippines must overcome to achieve “economic complexity,” a measure of a country’s productive capabilities based on knowledge and diversity, Sen. Juan Edgardo Angara told Stanford University students on Wednesday.
In an online lecture before students of the American university’s Public Policy Program, the chair of the Senate finance committee said the Philippines continued to grapple with the challenge of keeping its skilled workforce from greener pastures abroad.
“In the case of the Philippines, our domestic capability is bleeding out because our biggest export is in fact our people,” Angara said during his talk titled “The Pursuit of Economic Complexity in the Philippines.”
“It is said that there are at least 10 million Filipinos working overseas primarily because job opportunities at home are scarce or not lucrative enough to earn a decent living,” he said.
But Angara said the Philippines had the potential for prosperity if it could take full advantage of its human and material resources.
After all, the Philippines has managed to transform itself from a country that ships out primarily agricultural products to one that produces and exports more complex products, particularly in the electronics sector, he said.10-spot jump in rank
In 2018, the Philippines ranked 35th in the Economic Complexity Index (ECI), jumping 10 spots from 45th in 2008.
The ECI is part of the Atlas of Economic Complexity developed by Harvard University’s Ricardo Hausmann and Massachusetts Institute of Technology’s Cesar Hidalgo, which outlines the productive capabilities of a country based primarily on what it is exporting.
“The Philippines ranked 35th, which is not bad, considering that the ranking places us fourth in (Association of Southeast Asian Nations) behind only Singapore (fifth), Thailand (22nd) and Malaysia (26th), and ahead of countries like Canada (39th), India (42nd) and New Zealand (54th),” he said.
“We’re recognized as a regional leader, suggesting that we must have been doing something right,” Angara said.
In 2018, the gross domestic product per capita of the Philippines was at $3,102, growing at an average of 4.8 percent over five years.
Collective effort crucial
“Because economic complexity describes the productive know-how or knowledge embedded within a country’s productive structure, it has a strong correlation with the income per capita that the country is able to generate,” Angara said.
“Complexity is not only an outcome of prosperity—it is in fact a driver of it,” he said.
Angara said an economically complex society had two basic characteristics: “First, that they’ve accumulated a sufficient level of productive knowledge that is spread across many actors; and second, that they’ve successfully organized themselves or have established the environment where a diversity of actors can recombine this knowledge into actual products and services.”
“In a sense, the Philippines has achieved the first characteristic,” he said.
“What’s crucial is the collective effort. In the end, the best opportunities for growth are the ones that we create for each other, with each other,” he said.